Term Insurance Top Financial Priority Of Gen Z

Despite being digital natives, India’s working Gen Zs are emerging as a surprisingly pragmatic generation—especially when it comes to financial protection

Girish J Kalra, Chief Marketing Officer, Tata AIA Life Insurance

FinTech BizNews Service

Mumbai, 12 May, 2025: Despite being digital natives, India’s working Gen Zs are emerging as a surprisingly pragmatic generation—especially when it comes to financial protection. A new study by Tata AIA Life Insurance, conducted with NielsenIQ, reveals that term insurance has become the top financial priority for this cohort, driven by a strong desire for long-term security, affordability, and simplicity.

Titled ‘New Age Habits, Traditional Values: Gen Z’s Approach to Financial Planning’, the study surveyed working Gen Z individuals aged 21–28 years (born between 1997-2012) and uncovered a powerful insight: this generation is not just tech-savvy—they are protection-savvy. Gen Zs are embracing term insurance not as a backup, but as the foundation of their financial wellness strategy.

Key Insights: Gen Zs Prioritize 3 Pillars of Protection

1. Term Insurance Takes Centre Stage

With rising awareness around financial risk and affordability, term plans have emerged as Gen Zs' top choice.

• 31% of Gen Z respondents plan to purchase term insurance, the highest among all life insurance categories available to them.
• 1 in 4 prefer a Term + Wealth combo, blending protection with savings.
• Notably, 57% of Gen Z intenders are willing to invest over ₹2,000 per month, showing a stronger intent than current policyholders in this cohort.

2. Early Retirement Planning Gains Ground

Gen Zs are also fast-tracking the retirement conversation. With growing interest in the F.I.R.E. (Financial Independence, Retire Early) movement, many are balancing present-day needs with a long-term view.

• 18% are already considering retirement and pension plans, a notable shift from the wait-and-watch approach of previous generations.

3. Health & Wellness as Key Decision Factors

For Gen Zs, financial products without health benefits are a no-go.

• 60% of respondents prioritize physical health offerings when choosing a life insurance provider.
• Male Gen Zs (65%) place a higher emphasis on wellness benefits compared to female Gen Zs (54%).

Girish J Kalra, Chief Marketing Officer, Tata AIA Life Insurance, said:

“Our research underscores some vital insights: while Gen Zs are highly digital, they continue to rely on time-tested financial solutions such as term insurance for long-term security. With a focus on financial protection, health and wellness, and early retirement planning, Gen Zs are actively preparing for their future. At Tata AIA, we are committed to providing tech-enabled, accessible insurance solutions that meet the evolving needs of this forward-thinking generation.”

Traditional Values Meet Digital Habits

Even as Gen Zs swipe, scroll, and shop online, financial trust matters a lot.

• 53% rely on agents or bank advisors for insurance purchases, with the rest being through online and other channels.
• At the same time, 25% seek financial advice on social media, showing the growing influence of digital creators and content.

Summary:

Gen Zs may be the youngest earners in India’s workforce, but they are displaying the maturity of seasoned planners—embracing term insurance early, preparing for retirement, and valuing health as much as wealth. This generation is redefining how India plans for tomorrow.